Dubai Stocks Drop for a Second Day as Tamweel Retreats
Tamweel PJSC (TAMWEEL), a Dubai-based mortgage provider whose shares doubled this year, fell to the lowest in almost a month. Emirates Integrated Telecommunications Co. (DU), the smaller of the two United Arab Emirates’ mobile-phone operators known as Du, declined to the lowest since Aug. 13. The DFM General Index (DFMGI) dropped 0.9 percent to 1,558.83 at the close in Dubai, the lowest since Aug. 8. The Bloomberg GCC 200 Index rose 0.1 percent.
Dubai’s benchmark gauge climbed in the past four weeks, taking this year’s gain to 15 percent as the emirate’s economy rebounded and earnings at companies such as developer Emaar Properties PJSC (EMAAR) beat analysts’ estimates. The rally left companies on the index trading at 14.7 times their earnings, compared with 11.7 times for the MSCI Emerging Markets Index, according to data compiled by Bloomberg.
“It’s a normal profit-taking situation,” said Talal Touqan, head of research at Al Ramz Securities LLC in Abu Dhabi. “Sentiment is affected by global factors, but it’s justified by internal factors,” with second-quarter results out of the way and “the price level of most of the stocks close to the holding cost of the clients, so everyone now is willing to exit whenever a drop comes.”
The MSCI Emerging Markets Index fell 0.4 percent. Europe’s Stoxx 600 index declined 1.8 percent last week amid renewed concern about the ability of the euro area’s officials to stem the region’s debt crisis.
Tamweel declined 1.6 percent to 1.23 dirhams, the lowest since July 29. Du, which has the fourth-biggest weighting on Dubai’s index, fell 0.6 percent to 3.48 dirhams. Emaar, the company with the heaviest weighting on the gauge, slipped 1.2 percent to 3.35 dirhams, paring this year’s gain to 30 percent.
Abu Dhabi’s ADX General Index and Oman’s MSM30 Index dropped 0.4 percent. Bahrain’s measure declined 0.5 percent and Kuwait’s gauge rose 0.4 percent. Qatar’s QE Index lost 0.1 percent and Saudi Arabia’s Tadawul All Share Index advanced 0.5 percent.
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